PRESENTATION ON DATA MINING

DATA MINING
Data mining is becoming a fundamental component of the global business infrastructure that assists the firm in the decision making process and helps them capture the multifaceted aspects of the new economy. The process of extracting knowledge from data and information stored in databases, data warehouses, and other repositories. This process is called data mining.

DM DEFINITIONS ARE DERIVED FROM THE

INTERACTION OF THREE ENTITIES

Scientific Knowledge

Business Community

Information Technology

SCIENTIFIC KNOWLEDGE A body of scientific knowledge accumulated through decades of forming well established disciplines such statistics, machine learning and artificial intelligence. INFORMATION TECHNOLOGY A technology evolving from high volume transaction systems, data warehouses and internet. BUSINESS COMMUNITY A business community forced by an intensive competitive environment to innovate and integrate new ideas, concepts and tools to improve operations and DM quality

DATA MINING AND BUSINESS INTELLIGENCE

DATA MINING

BUSINESS INTELLIGENCE

DM is producing knowledge and discovering new patterns to describe the data. DM is also predicting future values and business behaviour.

BI is a global term for all processes, techniques and tools that support business decision making based on information technology. Data mining is a component of Business intelligence

BI

Decision maker Business analyst

Data Mining Data exploration statistics, query reporting

Data warehouses

Managers

Data Architects

Databases

Database Administrator

REASONS FOR GROWTH

1.

2.
3.

Competition Information glut The need to serve the knowledge workers efficiently

DATA MINING PROCESS

DATA MINING APPLICATIONS

1.

2.

3.

4.

5.

Market Management Applications: Market segmentation, target marketing, churn prediction. Sales Applications: Trend analysis, forecasting, pricing strategy. Risk Management Applications: Fraud detection, customer retention. Web Applications: Web analytics where DM is applied to the activity logs of web servers to gain insights about web surfers behaviour. Text Mining: Mining customers letters to reveal major complaints, mining maintenance documents to match with a specific failure, mining customers e-mails to automate responses

DM

AS

REQUIRED

COMPONENT

FOR

VARIOUS

APPLICATIONS IN DIFFERENT DEPARTMENTS

Sales Department (Sales forecasting & trends)

CRM ( Churn & profitability)

Marketing Department (Segmentation)

Finance

DATA MINING

DATA MINING CHALLENGES

Insufficient Understanding of Business Needs Data Problems - Bad quality, incomplete, incorrect etc. Careless Handling of Data a) Over quantifying data b) Miscoding data c) Analyzing without taking precautions against sampling errors d) Incorrectly handling missing values Modeling Mistakes Inadequate Tools, Bad Sampling Invalidly Validating the Data Mining Model